#OneSouthAsia Webinar Summary How can Regional Cooperation support COVID recovery in South Asia? The World Bank launched the #OneSouthAsia series of webinars as a platform to exchange views and build consensus about joint actions South Asian countries can take to address shared problems and strengthen regional institutions, infrastructure, and trade links. We invite you to participate in the webinars and to read about our work at www.worldbank.org/OneSouthAsia.   Context: Like the rest of the world, countries across South Asia are seeking an economic revival. And today, regional cooperation is more critical than ever in the world’s least-integrated region. Evidence shows that regional integration has the potential to produce significant gains in the countries of South Asia, especially in intraregional trade, energy, and transport. But at the same time national governments are increasingly focusing inward with export restrictions, trade disruptions, and plans for self-reliance. Summary of Discussion: Hartwig Schafer, the World Bank’s vice president for the South Asia region, opened the webinar describing how national lockdowns temporarily halted most manufacturing and services. Supply disruptions and lack of effective demand will result in the region’s worst economic performance in more than 40 years and shrink the economy in 2020. World Bank research in the spring projected the regional economy will contract by 2.7 percent in 2020 instead of growing by 5.5 percent as forecast prior to the pandemic. Today in South Asia, like 70 years ago in Europe, the regional integration agenda is important, he said. The World Bank’s regional cooperation work in South Asia has accomplished much during the past 10 years with landmark investments in the Central Asia-South Asia Transmission project (CASA-1000), cross-border transmission capacity between Bangladesh-India and India-Nepal, and the $50 million Plastic-free Rivers and Seas for South Asia project. Page 1 - #OneSouthAsia webinar on Sept. 2, 2020 Cecile Fruman, the World Bank’s director for regional integration and engagement in South Asia, emphasized the bank’s commitment to help countries work together on shared problems. “The magnitude of the challenges requires countries to work together,� she said. The bank recently updated its regional integration, cooperation and engagement (RICE) strategy in South Asia as a framework for the bank’s regional projects, regional trust funds, and engagement with key development partners. The strategy has three focus areas: enabling regional connectivity, reducing vulnerabilities and managing resilience, and investing in human capital. Panelists Rubana Huq of Bangladesh, Amb. Shyam Saran of India and Swarnim Wagle of Nepal shared ideas how regional cooperation can support social and economic recovery from COVID-19 amid other challenges such as climate change, natural disasters, and border tensions. Huq is a businesswoman and president of Bangladesh Garment Manufacturers and Exporters Association. Saran, a former Indian foreign secretary and diplomat, is a senior fellow at the Centre for Policy Research. Wagle, a former vice-chairman of the National Planning Commission of Nepal, is chairman of the Institute for Integrated Development Studies. Saran urged the audience to acknowledge that the current health and economic crisis coincides with renewed political tensions in South Asia, reflected mainly in India’s relations with neighbors such as Pakistan and Nepal. “The question is whether COVID-19 offers some opportunity to alter these negative trends since no meaningful regional cooperation, let alone integration, is possible without a minimal level of trust and mutual confidence,� he said. Huq agreed, saying, “there is trust deficit in this entire region.� She noted that while nations are looking inward because of COVID-19, “it’s also important to understand that no one single country can act in isolation.� Wagle talked about turning crisis into an opportunity: “As the trust is low, COVID-19 presents an opening to repair this rupture.� The panelists identified three potential areas for cooperation: trade, health care, and finance. Trade - “A temporary suspension of non-tariff trade barriers could jump-start economies, especially in South Asia’s smaller countries,� Wagle said. Such a move would boost trade within South Asia, which lags ASEAN and other regions in intraregional trade. He praised India for demonstrating good will with trading partners by waiving the financial penalties Nepal incurred for buying less electricity than contracted. Saran said with rising protectionism and shrinking overseas markets, the South Asian Free Trade Area (SAFTA) trade pact could become an economic lifeline for the region. Huq agreed that non- tariff barriers have impeded trade for too long, and SAFTA should remain open, vibrant, and flexible. She noted that regional value creation should be a priority in South Asia. Health care - Saran suggested advancing a regional agenda by cooperation on COVID-19. Once an effective vaccine becomes available, he India’s expertise and large pharmaceutical capacity could be mobilized to manufacture the vaccine for South Asia. Wagle noted that India is home to the Serum Institute in Pune, the world’s largest maker of vaccines, and said declaring a COVID-19 vaccine as a regional public good would make it universally available and suspend any commercial or patent rights. Huq said India could take a similar role leading regional production of fabric for personal protection equipment such as masks and gloves. Finance – Currency swaps are another tool of regional cooperation to help countries when funding in their local currency becomes difficult. For example, India’s central bank earlier this year extended a $400 million currency swap facility to Sri Lanka to boost the island economy's foreign exchange reserves and financial stability. “India has large and comfortable foreign exchange reserves which may enable swap facilities for South Asian neighbours who may be under balance of payment pressures,� Saran said. Wagle added that concessional lines of credit could also be offered to countries facing liquidity and balance of payment problems, which would “instill a lot of confidence at a regional level.� Speakers raised other ideas for potential regional cooperation, including: Page 2 - #OneSouthAsia webinar on Sept. 2, 2020 • Sharing data about cross-boundary problems such as air pollution and marine pollution to make better policy decisions; • Sharing pharmaceutical expertise to develop and process medicinal plant products for consumers; • Promoting digital collaboration, possibly with an e-learning or e-marketplace site available throughout South Asia; • Expanding the South Asian Association for Regional Cooperation (SAARC) food bank, which now holds about 500,000 tons of grain; and • Exploring a region-wide skills testing and certification program to make it easier for skilled workers to move across South Asia. Discussing different areas of collaboration, Huq said, “Industry, knowledge and governance are never aligned. For regional cooperation to happen, we need think tanks to come together, industry bodies to convene and governments to get aligned�. Fruman closed the discussion, re-affirming the World Bank’s commitment to regional cooperation. “Regional cooperation is not nice to have, it’s a compulsion, there is no alternative,� she said. “COVID- 19 brings opportunities in areas never thought of in the past – vaccine development, e-health, digital applications, education, online businesses, trade facilitation, to name a few. As we re-orient toward resolving these newer challenges, it is important to not lose the core of the regional cooperation agenda, which is opening borders, facilitating cross-border trade and free movement of people, strengthening regional institutions, and tackling climate change.� The #OneSouthAsia dialogue was recorded and is available here. Below are questions from the audience that could not be answered during the webinar because of time constraints. Audience Questions What role can and should the World The #OneSouthAsia series is a platform for dialogue and we hope it Bank play in convening governments will bring stakeholders together for conversations to guide policy and stakeholders around the table? choices and actions. The World Bank has promoted regional We have seen a lot of demand for cooperation in South Asia since 2010. We have found that convening stakeholders in a collaborative environment and sharing regional discussion on educational data can lead to new ways of thinking, consensus building, and challenges, particularly during COVID-coordinated action. For more details, see our updated Regional 19. Integration, Cooperation and Engagement (RICE) strategy: https://documents.worldbank.org/en/publication/documents- reports/documentdetail/116411598021247454/world-banks- approach-to-south-asia-regional-integration-cooperation-and- engagement-sa-rice-2020-2023 The region’s unprecedented level of The World Bank uses analysis, data, and other evidence to inform nationalism prior to COVID-19 stakeholders’ views of regional challenges and the roles of continues to divide communities. neighboring countries. More was discussed about this in the What roles should individual webinar, which was recorded and posted at: https://live.worldbank.org/how-can-regional-cooperation-support- economies, regional institutions such south-asia-covid-19-recovery#discussion as SAARC and BBIN, and multilateral entities such as the World Bank take to manage emerging regional crises for better outcomes? Page 3 - #OneSouthAsia webinar on Sept. 2, 2020 Access to digital space, tools, and The World Bank is committed to the economic empowerment and technologies are critical in moving inclusion of women and our projects routinely include gender forward after COVID-19 but the digital equality. Additionally, our South Asia Gender Innovation Lab gender gap in South Asia is contributes research to shape gender equality policies and programs. It produces evidence on what works best to address abysmal. How do we help women and gender inequality. Read more about the lab’s work at: girls so they don’t continue falling https://www.worldbank.org/en/programs/world-bank-south-asia- behind? region-gender-innovation-lab We also recommend reading: https://blogs.worldbank.org/endpovertyinsouthasia/wepower- helps-bangladeshs-largest-power-distribution-company-boost-its- female https://blogs.worldbank.org/endpovertyinsouthasia/empowering- minority-women-india-stories-resilience-and-hope-during-covid How could collaboration address The ASEAN and EU experiences show that regional integration can resource constraints that countries in produce significant economic and welfare gains for participating the region face because of reduced countries. Similar gains are possible in South Asia, especially revenue collection from businesses? in sectors such as trade, energy, and transport. For example, intraregional trade is at only one-third of its potential with a gap estimated at $23 billion. Read more here: https://openknowledge.worldbank.org/handle/10986/30246 Since tourism is a common thread South Asia’s tourism industry has lost more than 10 million jobs that runs through the region, what and $52 billion in GDP to COVID-19, according to recent World can these countries do (as a region) to Bank estimates. Tourism ministries, business groups, and travel revive this sector that supports businesses throughout South Asia can stretch scarce government resources and private sector budgets by working together on livelihoods of the tens of millions? common goals. Read more in our latest brief at: https://openknowledge.worldbank.org/handle/10986/34050 How might collaboration be fostered Regional cooperation holds immense potential for education, in the areas of human development, research, and job mobility. One option discussed during the especially in (a) higher education webinar is to explore a region-wide skills testing and certification while noting the information program for plumbers and electricians. Many other ideas are in a 2019 World Bank report at: exchange on research in http://documents1.worldbank.org/curated/en/735021553593295 health/pandemic related issues? And, 199/pdf/South-Asia-Challenges-and-Benefits-of-Research- (b) inter-regional migration of Collaboration-in-a-Diverse-Region.pdf workers? You may also be interested in this: https://blogs.worldbank.org/endpovertyinsouthasia/covid-19- boosts-digitization-higher-education-bangladesh India, to become a true leader of To know more, read some of our latest blogs: South Asia, needs to address the https://blogs.worldbank.org/endpovertyinsouthasia/how-did- demands of its neighbors on trade, indias-rural-economy-fare-through-covid-19-lockdown-and-re- connectivity, migration of workers, opening technology transfer, and well-knit https://blogs.worldbank.org/endpovertyinsouthasia/protecting- regional cooperation. and-investing-south-asias-people-more-important-now-ever https://blogs.worldbank.org/endpovertyinsouthasia/empowering- minority-women-india-stories-resilience-and-hope-during-covid Page 4 - #OneSouthAsia webinar on Sept. 2, 2020 Could the World Bank coordinate South Asian cities are known hotspots for unhealthy air a city-level engagement across South pollution. Unusually clear skies and cleaner air followed Asia to maintain the clean lockdowns that attempted to curb the COVID-19 virus. As air benefits from lockdowns while countries respond longer term to the coronavirus, they have a unique opportunity to plan greener economies for a cleaner navigating the economic fallout environment. Countries can use fiscal stimulus spending for green and related challenges? projects that support economic recovery and improve the air, water, and soil. Read more at: https://openknowledge.worldbank.org/bitstream/handle/10986/2 8723/9781464811555.pdf https://blogs.worldbank.org/endpovertyinsouthasia/air-pollution- aggravating-covid-19-south-asia Very often, the private sector can go The private sector can play an influential role in the regional ahead on its own on the regional agenda, and advocating changes in policy. This was discussed by front. I understand that a pharma panelist Swarnim Wagle during the webinar, which was recorded company in Bangladesh is cooperating and posted at: https://live.worldbank.org/how-can-regional- cooperation-support-south-asia-covid-19-recovery#discussion with the Serum Institute of India for priority supply of vaccines. Can private companies in Nepal and other countries do the same? This could kick start the regional agenda. Can the World Bank help develop a As discussed during the webinar, regional cooperation could help South Asia Vaccination Programme? address several big issues in the health care sector, including a fair distribution plan for the eventual COVID-19 vaccine throughout South Asia. Globally, the World Bank is working with partners to speed up the development and deployment of an affordable vaccine available to all countries, as described in our June paper about COVID-19 at: http://documents1.worldbank.org/curated/en/136631594937150 795/pdf/World-Bank-Group-COVID-19-Crisis-Response-Approach- Paper-Saving-Lives-Scaling-up-Impact-and-Getting-Back-on- Track.pdf Challenges are many. We cannot The World Bank’s regional approach has identified areas of joint handle all. Can we pick a few and try action and an incremental approach to regional collaboration. For to make a difference? For example: more details, see our updated Regional Integration, Cooperation infrastructure for education at home and Engagement (RICE) strategy at: https://documents.worldbank.org/en/publication/documents- for students; preparation for food reports/documentdetail/116411598021247454/world-banks- security in future which might become approach-to-south-asia-regional-integration-cooperation-and- an issue in cross-border supply engagement-sa-rice-2020-2023 chain logistic. How can digital technologies support Going forward, digital will be at the core of most regional work. As regional integration in South Asia? discussed in the webinar, now is the time for countries to explore What is the role of infrastructure ideas to promote digital collaboration, possibly with an e- sharing (internet broadband, data learning site or e-marketplace site available throughout South Asia. Read more at: centers, etc.) and collaboration on https://blogs.worldbank.org/endpovertyinsouthasia/covid-19- digital solutions addressing the highlights-need-digitizing-and-automating-trade-south-asia COVID-19 health crisis? https://blogs.worldbank.org/endpovertyinsouthasia/covid-19- boosts-digitization-higher-education-bangladesh How can restrictive measures such You may be interested in watching a recent World Bank webinar as lockdowns and prohibitory orders devoted to the impact of COVID on the informal sector in South coexist with the opening of the Asia, which has the highest rate of informal employment among Page 5 - #OneSouthAsia webinar on Sept. 2, 2020 economy to take care of the daily developing regions. Informal workers are not protected by labor wage earners and migrant workers? Is laws and are more likely to lose their jobs and face extreme the trade-off inevitable or avoidable? poverty as the pandemic continues. A recording is available at: https://live.worldbank.org/expert-panel-informality-and-covid-19- south-asia We have been hearing about non- Non-tariff barriers have long hindered intraregional trade in South tariff barriers and non-tariff Asia. Lack of capacity on either side of the border to negotiate to measures many years. What is the key reduce non-tariff barriers has always been a challenge in the reason why they persist? region. Additionally, India’s asymmetric size adds to the concerns of companies in smaller countries. For details, see World Bank's report, A Glass Half Full: The Promise of Regional Trade in South Asia: https://openknowledge.worldbank.org/handle/10986/30246 Can a country focus on its recovery Collaboration is an opportunity that should be tapped at all levels priorities when multiple regional – regional as well as sub-regional. One level of collaboration does cooperation organizations exist? not and should not rule out the scope of other collaborations. A well thought out global response The World Bank is helping more than 100 developing nations with has been largely absent in addressing the COVID-19 crisis by providing up to $160 billion in financing for the COVID-19 crisis. What is the World health, economic, and social impacts from the pandemic. Read Bank doing to address the concerns more about our global work at: https://www.worldbank.org/en/about/what-we-do/brief/world- of developing countries? bank-group-operational-response-covid-19-coronavirus-projects- list How can more regional and sub- Shared management of the Indus, Ganges, and Brahmaputra river regional cooperation on shared basins can increase fair and inclusive development and climate natural resources like trans-boundary change resilience. Collaboration is also important for the rivers and associated value chains environmentally fragile Sundarbans, the vast wetlands along the border of Bangladesh and India. The World Bank and its partners, help South Asia region including the South Asia Water Initiative, provide funding and #BuildBackBetter? analyses to promote regional collaboration in managing trans- boundary rivers and groundwater. Read more at https://www.worldbank.org/en/programs/south-asia-regional- integration/water Page 6 - #OneSouthAsia webinar on Sept. 2, 2020